pt krakatau steel (persero) tbk press conference sep16.pdf · pt krakatau steel (persero) tbk...
TRANSCRIPT
October 2016
PT Krakatau Steel (Persero) Tbk
Management Presentation
Table of Contents
1. Company Overview 2
2. Growth Strategies 16
3. Financial Highlights 21
Attachments
1
Company Overview
Section 1
2
PT Krakatau Steel (Persero) Tbk (“KS” or the “Company”) is the largest steel
producer in Indonesia with over 46 years of experience in the steel industry and total
rolling capacity of 3.15 million tons per annum (mtpa)(1). The Company is 80% owned
by Government of Indonesia and 20% by public
- #1 in hot rolled coil (“HRC”) and cold rolled coil (“CRC”)
- #2 in wire rod (“WR”)
• The Company has planned to increase its total rolling capacity by 47.62% to 4.65
mtpa with an additional capacity of 1.5 mtpa through the construction of Hot Strip Mill
#2 by 2019
• The Company’s integrated upstream and downstream production facilities with
supporting infrastructure are strategically located in Cilegon, Banten province with
convenient access to raw materials and customers
• The Company has formed strategic partnership with the world’s leading steel
companies:
- Posco (South Korea): joint venture (JV) establishment of PT Krakatau
Posco(2), an integrated steel producer with a capacity of 3.0 mtpa
- Nippon Steel Sumitomo Metal Corp. (Japan): JV establishment of PT
Krakatau Nippon Steel Sumikin(3), a steel manufacturer for automotive
industry with a capacity of 500,000 tpa
- Osaka Steel Co., Ltd. (Japan): JV establishment of PT Krakatau Osaka
Steel(3), a producer of steel bars and sections with a capacity of 500,000 tpa
• The Company has grown its asset by over 11% CAGR 2011-2015 with its 11
subsidiaries and 15 associated entities (including JVs) and increased its steel
sales volume significantly by 40% Year-On-Year (YoY) in 1H2016
Brief Overview
(1) Existing total rolling capacity of Hot Strip Mill (2.4 million ton), Wire Rod Mill (0.45 million ton), Bar Mill (0.15 million ton), and Section Mill (0.15 million ton), excluding JV’s rolling capacity
(2) KS owns 30% of the JV; (3) KS owns 20% of the JV
The first and largest integrated steel producer in Indonesia with leading
domestic market share
3
VISION
An integrated steel company with competitive
edges to grow continuously toward a leading global
enterprise
MISSION
Providing the best quality steel products and related
services for the prosperity of the nation
Key Milestones
1970
PT Krakatau Steel
established
1978
Integrated Operation of KS
- DR Hyl I (2.0 mtpa)
- Billet Plant (0.5 mtpa)
- Wire Rod Mill (0.22 mtpa)
- Coal-fired Steam Power Plant & Port
1993
Expansion of
- Direct Reduction Plant (1.3 mtpa)
- Slab Steel Plant II (0.8 mtpa)
- HSM (1.8 mtpa)
1997
Completed
expansion of
Wire Rod Mill to
0.45 mtpa
2003
Optimization of:
- CRM
- HSM
2005
Modernization
of HSM (2.0 mtpa)
2010
IPO
Revitalization
of HSM (2.4 mtpa)
2011 2013
Commercial operation
of PT Krakatau Posco
(3.0 mtpa)
Port Expansion to 25 mtpa
handling capacity
Commercial operation of:
- ERW #2: 150,000 tpa
- KDL CCPP 120 MW
2014 2016
Started construction of
HSM #2 (1.5 mtpa)
Sustainable development through the expansion and modernization
1983
Commercial operation of:
- Slab Steel Plant I (1.0 mtpa)
- HSM (1.0 mtpa)
4
Note: mtpa: million tons per annum
Commercial operation of:
- Bar Mill (150,000 tpa)
- Section Mill (45,000 tpa)
1975
2001
Expansion of
Section Mill to
150,000 tpa
Business Portfolio
Supporting Business
Sponge iron Producer
Steel Profile &
Bar Producer
Pipe Producer
Other Business
Ste
el B
usin
es
s
1. Flat Product
(Steel Slab, HRC/P, CRC/S)
2. Long Product
(Steel Billet, Wire Rod)
Core Business
Raw Material Solution
Raw Material Ironmaking Steelmaking Rolling Down Stream
No
n -
Ste
el B
us
ine
ss
Ma
jor
Aff
ilia
tes
• PT Krakatau Posco (30%)*
• PT Krakatau Nippon Steel Sumikin (20%)*
• PT Krakatau Osaka Steel (20%)*
• PT Indo Japan Steel Center (20%)
• PT Latinusa (20.10%)
• PT Kerismas Witikco Makmur (29.31%)
• PT Krakatau Semen Indonesia (50%)
5
PT Krakatau National
Resources (100%)
PT Meratus Jaya Iron and
Steel (66%)
PT Krakatau
Wajatama (100%)
PT KHI Pipe Industries
(100%)
Effective ownership: direct/indirect ownership
Diversified business portfolio to supports KS’ business performance
Electricity Provider
PT Krakatau Daya Listrik (100%)
Port Service Provider
PT Krakatau Bandar Samudera
(100%)
Industrial Water Provider
PT Krakatau Tirta Industri (100%)
IT Service Provider
PT Krakatau Information Technology
(100%)
Health Care Service
PT Krakatau Medika (98%)
Industrial Estate Provider
PT Krakatau Industrial Estate
Cilegon (100%)
EPC Company
PT Krakatau Engineering
(100%)
*KS has the rights to increase its ownership up to 45% in Krakatau Posco, 51% in Krakatau Nippon Steel
Sumikin, and 51% in Krakatau Osaka Steel
PTKS Production Process
6
Slab Steel Plant 2
Slab Steel Plant 1
Billet Steel Plant Wire Rod Mill
Cold Rolling Mill
Direct Reduction
Plant
2x130 ton
4x130 ton
4x60 ton
1xLF, 1xRH 1xCCM
2xLF 2xCCM
2xCCM 1xLF
DRI
Steel Slab
Steel Billet
Hot Rolled
Coil 1.7 mtpy
2.0 mtpy
0.65 mtpy 0.45 mtpy
Cold Rolled Coil/Sheet
Hot Rolled Coil/Plate
Wire Rod
Bars & Sections
Hot Strip Mill
2.4mtpy
0.85 mtpy
Cold Rolled
Coil
Wire Rod
0.2 mtpy
Bars & Sections
PT Krakatau Steel
Slab Steel Plant
1x300 ton 1xLF, 1xRH 1xCCM
Plate Mill Plate
1.5 mtpy
Steel Slab
3.0 mtpy
1.5 mtpy
PT Krakatau Posco
PT MJIS Rotary Kiln
2x150.000 ton
0.3 mtpy
Blast Furnace
Undergoing
43% 20%
37%
#1
HRC CRC WR
Ma
rke
t s
hare
in
In
do
ne
sia
(1
H2
01
6)
Pro
du
cti
on
ca
pac
ity
(20
16
) Leadership in the Indonesian Steel Market
Dominant market position across major steel products in Indonesia
(mtpa) (mtpa) (mtpa)
11% 33%
55%
#2 29%
17%
54%
(39%)* (29%)* (10%)*
KS Other domestic producers Import *( ) 2015 market share
7
Total Demand 2015:
3.97 million tons
#1
0,35
0,7
1,5
2.4*
Gunawan Dianjaya
Gunung Raja Paksi
Krakatau Posco
Krakatau Steel
0,12
0,23
0,4
0,85
Gunung Garuda
Little GiantIndonesia
Essar Indonesia
Krakatau Steel
0,1
0,25
0,45
0,7
Gunung Gahapi
Master Steel
Krakatau Steel
Ispat Indo
*) new production capacity of 3.9 mtpa
Total Demand 2015:
1.83 million tons
Total Demand 2015:
1.27 million tons
Note: (1) Defined as KS HRC domestic selling price less Far East import HRC price
and excludes duties and freight
2013: US$681-US$572
2014: US$649-US$520
2015: US$493-US$338
1H2016: US$426-US$348
(2) Breakdown of 2015 imports by region: Japan (39%), South Korea (32%), and
Taiwan (10%)
(3) Currency conversions based on exchange rate as of June 30, 2016 Rp.
13.885/US$1
Source: CRU Strategies, Company data
Location
advantages
Faster physical delivery
Short turnaround and lead times
Accommodate both large and small orders
Economies of scale in production
Negotiating power with our suppliers and
customers due to our size
Dominant
position and
customer
relationships
Support for
domestic steel
industry
Fair trade practices when necessary
Re-registration of steel importers
Indonesia National Standard (SNI) certification
requirements
Local content policy
Presidential decree that encourages the
consumption of local products
Historical premium price to imports
Advantageous Pricing over Imports
KS enjoys favorable pricing due to its competitive advantage and strong Government support
109
129
155
78
0
100
200
2013 2014 2015 1H2016
USD
/to
n
8
#2 Integrated production facilities #3 Close to customers #1 Raw materials access on-site
63% of customers are located in Greater Jakarta(1)
94 km from
Jakarta via
Toll road
Rail
(1) Based on 2015 steel products sales volume
Transportation cost savings, supply chain efficiency and
faster customer responsiveness provide KS with significant advantages over our competition
Integrated Production Facilities Across Value Chain
9
Downstream
PT KHI Pipe Industries
(Pipe & Coating Producer)
Power
PT Krakatau Daya Listrik
(Electricity Generation) PT Krakatau Osaka Steel
Galvanized Steel /Annealed
CRC Producer
PT Krakatau Nippon Steel Sumikin
Port
PT Krakatau Bandar
Samudera
(Port Service)
Integrated Steel
Mill
(Slab & Plate
Producer)
Integrated Steel Mill
(Slab, Billet, HRC,
CRC, WR Producer)
Water
PT Krakatau Tirta Industri
(Industrial Water Provider)
Bar &
Section
Producer
PT Krakatau Wajatama
KS
PT Krakatau Steel PT Krakatau Posco
Bar & Section
Producer
HRC
CRC
Wire
Low customer concentration
Top 5 customers of total steel
sales in 1H2016
Automotive
Coil Centers
Drum
Pipes, tube packaging, tin
plates
Home-office appliance
Enamel
Galvanized steel sheet
Automotive
Mechanical engineering and
boiler pressure vessels
General structure
Oil and gas pipes
Shipbuilding
Automotive
Appliances
Bolts and nuts, nails
Construction, welding
Cable wires, wire rope
Spring bed’ electrode
Nails, welding
Diverse end-markets
End-markets
Proportion of total steel sales in 1H2016
Strong sales proportion (1)
Strong and Diversified Customer Base
Our customer and distribution mix provides us with leverage in the market
Manufacturing Company
66%
Stockist & Coil Center
34%
A 9%
B 5%
C 5%
D 4%
E 7%
All other customers
70%
10
Product
Sales volume: 1.17 million tons
Global Steel Price (Hot Rolled Coil)
Steel price hit a lowest point at December 2015, but start to increase since beginning of 2016
11
Jul-08; 1090
Des-15; 265,5
Sep-16; 400,5
0
200
400
600
800
1000
1200
Hot Rolled Coil; CFR East Asia (USD/ton)
Performance of Chinese Steel Mills
Low steel prices have an impact on the loss of Chinese steel mills
12
Profit/(Loss) (USD Million) – 2015 Production Cost and Export Price
51% of Chinese steel producers suffered losses
in 2015. Total losses reached USD 12.6 billion
(WSD, Inside Track 146, 2016).
Chinese HRC export price lower than its
production cost (Operating Cost). At August
2015, the difference reached USD 60 per ton.
Source: Morningstar (accessed April 2016) Source: World Steel Dynamics (Inside Track, September 2015)
Operating Cost (Before Depreciation and Interest)
156
7
(12)
(387)
(456)
(708)
(740)
(922)
(1.100) (900) (700) (500) (300) (100) 100 300
Baosteel
Lingyuan
Shagang
Xinjiang Ba Yi
Hunan Valin
Angang
Maanshan
Chongqing
7,4
9,0
11,0
12,5 12,7 12,9
11,4
3,4
4,9
6,7 7,9 8,2
7,3 7,6
2009 2010 2011 2012 2013 2014 2015
Consumption Import
Indonesia’s Steel Demand
Indonesian steel consumption has increased with limited domestic supply.
Hence, market opportunity is significantly high.
Finished steel consumption in Indonesia (mn ton)
13
Indonesia’s steel demand drivers
Energy sector
High population density Steel intensive construction, including among others, residential and non-residential buildings, high-rise buildings
Demand for infrastructure Infrastructure, including among others, toll-road, airports, seaports, bridges, and ship building
Power plant, electric transmission and oil & gas development projects
Indonesia’s Real GDP (billion USD)
540
755
893 918 910 889 862
2009 2010 2011 2012 2013 2014 2015
Source: South East Asia Iron & Steel Institute Source: World Bank
61% 57% 65% 63% 61% 55% Imports 46%
60,8 85,9
181,7
297,4
391,9
889,8
Indonesia Philippines Vietnam Thailand Malaysia Singapore
Per Capita Steel Consumption
Lower steel consumption per capita compared to other
selected ASEAN countries
Source: World Steel Statistic (2015), World Economic Outlook
GDP per Capita
Kg
per
Cap
ita
Indonesia set to enter a highly “steel-intensive”
phase of growth
Steel consumption per capita typically increases with higher overall economic growth
14
Steel consumption per capita in 2014 (kg)
Source: World Steel Statistic (2015)
15
PP No. 40, 2016 and PM ESDM No. 16, 2016
Steel industry is among industries which benefit from a more favorable gas price policy
Gas Price
Policy
Supply of 200,000 tons/year of steel for the construction of 46,000 km power transmission circuits in
5 years (Decree of Minister of Industry No. 15/M-Ind/Per/3/2016). First shipment was made on 26 Oct
2016.
Supply of 250,000 tons/year of steel for the construction 36 km of Jakarta - Cikampek elevated toll
road
Supply of corrugated steel for the planned construction of flyovers along 8,000 rail-road intersections
in several cities in Java island
Steel supply for State-Owned Enterprises (SOEs) projects: Kuala Tanjung Port - Medan (Pelindo I),
Celukan-Bali and Banyuwangi Ports (Pelindo III), and construction of Unloading Port (Pelindo I)
Steel supply for SOEs in heavy industry and shipbuilding sectors in relation to the National
Shipbuilding and Heavy Industry Forum, i.e. PAL, DPS, DKB, IKI, Barata Indonesia, BBI
SOEs
Synergy
Implementation of Indonesia National Standard (SNI) for steel products
Implementation of tariff barriers (anti dumping duty, safeguard and import duty) and non-tariff barriers
(trade regulation for alloy steel and local content policy/TKDN) to protect domestic steel industry from
unfair trade practices
Steel
Market
Policy
Capital injection by the government (PMN) of Rp 1.5 trillion as stipulated in Law No. 12/2016
regarding revision of Law No. 14/2015 regarding 2016 state budget (APBN 2016) Funding
The government provides strong support for the growth of domestic steel industry
Government Support for Indonesia Steel Industry
Growth Strategies
Section 2
16
Capacity and Competitiveness Improvement
Focus on capacity expansion and competitiveness improvement to meet increasing steel demand
and to face increasingly stiff competition
Capacity
Improvement
Competitiveness
Improvement
1
2
3
4
1
2
3
4
Program Additional Capacity Project Cost Completion
Schedule
HSM #2(1) 1.5 million ton HRC USD 505 million 2019
Push Pull Pickling Line 0.6 million ton HRPO USD 52 million
2018
Reversing Mill 0.4 million ton CRC 2018
PT KOS(2) 0.5 million ton Bar & Section USD 220 million 2016
(1) Part of the project cost will be funded by 2016 Rights Issue proceeds
(2) PT Krakatau Osaka Steel, JV with Osaka Steel Co., Ltd. in which KS has a 20% share
(3) PricewaterhouseCoopers report (PwC), 2015
(4) Start operating/first blow-in
Program Lower Production Cost(3) Project Cost Completion Schedule
Blast Furnace 58.2 USD per ton HRC USD 716 million 2016(4)
Coal-fired Boiler 2x80 MW 5.5 USD per ton HRC USD 102 million 2019
Coal-Fired Steam Power Plant 1x150 MW(1) 5.0 USD per ton HRC USD 175 million 2019
HSM #2 7.2 USD per ton HRC USD 505 million 2019
17
Increased Value-Added Products and Non Steel Business
Expansion of steel products to meet increasing demand from automotive sector
Increased Value-
Added Products
Non-Steel
Business
Improvement
1
2
(1) PT Krakatau Nippon Steel Sumikin, JV with Nippon Steel Sumitomo Metal Corporation (NSSMC) in which KS owns a 20% share
(2) PT Krakatau Semen Indonesia, JV with PT Semen Indonesia (Persero) Tbk in which KS owns a 50% share
(3) By PT Krakatau Bandar Samudera, a subsidiary which is 100% owned by KS
(4) By PT Krakatau Tirta Industri, a subsidiary which is 100% owned by KS
Program Capacity Product / Service Schedule
Jetty/Dock Development 7.3 (3) 1.3 million ton Loading and unloading services
for bulk materials
2017
Cipasauran Dam
Development(4)
750 lt/second Raw water for industrial needs 2019
Program Capacity Product Schedule
PT KNSS(1) 0.5 million ton Galvanized/Annealed CRC for
automotive
2017
PT KSI(2) 0.75 million ton Grinded Blast Furnace Slag for
cement raw materials
2017
1
2
18
Roadmap of Cost Efficiency
Blast Furnace
USD 58.2 / ton
0
100
200
300
400
500
600
700
800
900
100,000 200,000 300,000 400,000 500,000 600,000 700,000
US
D/t
on
Production capacity (cumulative) in thousand tons
HRC Operating Cost Curve *
Note: * Operating cost excludes depreciation, interest and SG&A of approximately USD 13 – 19 / ton,
USD 17 / ton and USD 45 – 55 / ton, respectively.
Source: PTKS, Metal Bulletin Q1 2015, PwC analysis
1 2 3 4 5
1. As-is
USD 496/ton 2. Blast Furnace
USD 437/ton
3. HSM #2
USD 430/ton
4. Coal Boiler 2 x 80 MW
USD 425/ton
5. Coal-firedSteam Power Plant
1 x 150 MW
USD 420/ton
Q1 15 HRC domestic price
USD 597 / ton
1
2
3
4
5
As-is
USD 496/ton
HSM #2
USD 7.2 / ton
Coal Boiler 2x80 MW
USD 5.5 / ton
Coal-firedSteam Power Plant
1x150 MW
USD 5.0 / ton
Total : USD 88.7 / ton
6
6 Gas price at
USD 5 / MMBtu
USD 12.8 / ton
6. Gas price at USD 5 /
MMBtu
USD 407/ton
Tier I Tier II Tier III Tier IV
Development program will enhance the competitiveness of the Company's products
19
Future Project Development
20
Hot Strip Mill #2
Product : Hot Rolled Coil
Capacity : 1.5 million ton per year
Progress : Groundbreaking August 2016
Completion : 1H2019
Blast Furnace
Product : Hot Metal
Capacity : 1.2 million ton per year
Progress : 96.0% (July 2016)
Completion : End of 2016 (FBI)
PT Krakatau Nippon Steel Sumikin
Product : Galvanized/Annealed CRC
Capacity : 0.5 million ton per year
Progress : 52.3% (July 2016)
Completion : Mid-2017
PT Krakatau Osaka Steel
Product : Bar & Section
Capacity : 0.5 million ton per year
Progress : 70.9% (July 2016)
Completion : End of 2016
PT Krakatau Semen Indonesia
Product : Grinded Blast Furnace Slag
Capacity : 0.75 million ton per year
Progress : 26% (July 2016)
Completion : 2017
Jetty 7.3 Development
Product : Harbor Service
Capacity : 1.3 million ton
Progress : 7.1% (July 2016)
Completion : Early 2017
Coal-fired Steam Boiler 2x80MW
Product : Electricity
Capacity : 2x80MW
Progress : -
Completion : 2019
Coal-fired Steam Power Plant 1x150MW
Product : Electricity
Capacity : 1x150MW
Progress : -
Completion : 2019
Picture of reference plant
Picture is a 3D model
Performance Highlights
Section 3
21
Sales Performance
Steel Sales Volume
(million tons)
Market Share
(%)
2015 1H
2015
1H
2016
HRC
38.6
33.9
43.5
CRC
29.2
25.9
29.2
WR
10.1
10.2
11.1
22
Significant increase in sales volume, mainly on the HRC sales volume
2,3
1,9
1,4
1,7
2014 2015 M92015 M92016
22.25
%
Sales Value Breakdown
53% 24%
6%
17% HRC
CRC
WR
Others
46%
28%
8%
18% 34%
24% 5%
37% 45%
22%
6%
27%
2014 2015 M92015 M92016
Financial Performance
Revenue & COGS
(million USD)
Gross Profit (Loss)
(million USD)
Operating Income (Loss)
(million USD)
EBITDA*
(million USD)
23
Financial performance improvement gained momentum in M9 2016 compared to M9 2015
1.869
1.322
993 982
1.828
1.358
1.014
844
2014 2015 M92015 M92016
Revenue
COGS
M9 2015 M9 2016 %
993.4 982.3 (1.1)
1,014.3 844.3 (16.8)
(1) (2) (2)/(1)
(71)
(184)
(118)
29
2014 2015 M92015 M92016
41
(36) (21)
138
2014 2015 M92015 M92016 (8)
(86) (69)
97
2014 2015 M9 2015 M9 2016
*EBITDA calculation excludes share of loss in associated company
Financial Position
24
2.604
3.702 3.832
2014 2015 M9 2016
886
1.788 1.800
2014 2015 M9 2016
Total Liabilities
(million USD)
Cash & cash equivalents
(million USD)
Total Assets
(million USD)
Total Equity
(million USD)
1.718
1.914
2.032
2014 2015 M9 2016
237
133 102
(2) (74) 21
2014 2015 M9 2016
Cash and Cash equivalent
Operating Cashflow
Disclaimer
25
IMPORTANT: The following forms part of, and should be read in conjunction with, this presentation
This presentation contains privileged information and has been prepared solely for the recipient. By accepting a copy (or the contents) of this presentation, you are deemed to have acknowledged
and agreed to the provisions appearing hereinafter. The existence of this presentation and the contents thereof should not be disclosed, reproduced, copied or otherwise disseminated to any other
person or published, in whole or in part, without prior consent of PT Krakatau Steel (Persero) Tbk. (“KS” or the “Company”)
Unless otherwise stated, the Company is the source for all data contained in this presentation. This presentation is not directed to, or intended for distribution to or use by, any person or entity that is
a citizen or resident or located in any locality, state, country or other jurisdiction where such distribution, transmission, publication, availability or use would be contrary to law or regulation or which
would require any registration or licensing within such jurisdiction
This presentation is made solely for information purposes and does not constitute or form part of any offer for sale or invitation, or solicitation of an offer, to subscribe for or purchase any securities
and should not be treated as giving investment advice, and neither this document nor anything contained herein shall form the basis of or be relied on in connection with any contract or commitment
whatsoever. This presentation does not constitute a prospectus or other offering circular in whole or in part. Any decision to purchase or subscribe for securities should be made only on the basis of
the information contained in a prospectus or offering circular issued by the Company in connection with any such offering. This presentation has no regard to the specific investment objectives,
financial situation or particular needs of any recipient.
This presentation contains forward-looking statements that involve risks and uncertainties. Actual future performance, outcomes and results may differ materially from those expressed in forward-
looking statements as a result of a number of risks, uncertainties and assumptions. Although the Company believes that such forward-looking statements are based on reasonable assumptions, it
can give no assurance that such expectations will be met. Representative examples of these factors include (without limitation) general industry and economic conditions, interest rate trends, cost
of capital and capital availability, and competition from other companies. You are cautioned not to place undue reliance on these forward looking statements, which are based on current view of the
management on future events
Information and opinions contained in this presentation are provided for reference of the recipients only and are not to be relied upon as authoritative or without the recipient’s own independent
verification or taken in substitution for the exercise of the recipient’s own judgment. No representation or warranty, either express or implied, is provided in relation to the accuracy, completeness or
reliability of the information contained herein. Any reference to past performance should not be taken as an indication of future performance. The information contained in this presentation is subject
to changes without notice. In furnishing the presentation, the Company has not undertaken to provide the recipient with access to any additional information or updates. None of the Company or the
banks warrant or guarantee whatsoever that this presentation will lead to the successful completion or consummation of any transactions
Accordingly, the Company and the banks disclaim any liability whatsoever in connection therewith and with any decisions that might be taken upon the basis of this presentation, directly or indirectly.
None of the Company, its affiliates, advisers or representatives shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this material or
otherwise arising in connection with this presentation. In particular, the Company and the banks owe no duty to the recipient (except as required by applicable laws) to exercise any judgment on its
behalf as to the merits or suitability of any transaction. This document is not intended to provide and should not be relied upon for tax, legal or accounting advice, investment recommendations or a
credit or other evaluation of any transaction. The recipient agrees that the merits or suitability of any such transaction to its particular situation will be independently determined by the recipient
including consideration of the legal, tax, accounting, regulatory, financial and other related aspects thereof
The recipient of this presentation shall only use the information contained herein solely in the context of the evaluation of the proposals set out in this presentation and not for any other purposes,
commercial or otherwise. Subject to the above, this presentation and the contents thereof are strictly confidential and remains at all times the property of the Company
Attachments
26
Steel Production Process
27
Direct Reduction
Plant
Slab, Billet, Bloom
Fine Ore
Coking Coal
Sintering Plant
Coke Oven Plant
Coke
DRI
PCI Coal
Pelletizing Plant
Blast Furnace
Iron Ore
Pellet
Pellet
Sinter Hot Metal
Electric Arc Furnace
Basic Oxygen Furnace
Scrap
Scrap
Cotinuous Casting
Machine
Rolling Mill
Liquid Steel
Liquid Steel
Lump Ore
Pelletizing Plant
Ladle Metallurgy
Hot & Cold Strip
Plate
Coils
Hot Rolled Bar
Rods
Tube Rounds
Structural Shape
Rails
Car - White Goods
Welded pipes - Ships
Rebar
Tire Wire – Nut bolt
Pipelines
Profile
Railway
Gas-based Route
Coal-based Route
Solid and Experienced Management Team
28
Appointed as President Director since 2015, with over 9 years in KS and 18 years in finance industry
Previously Finance Director of KS since 2007, Director of PT Bahana Pembinaan Usaha Indonesia (SOE), Vice
President Head of Corporate Banking Citibank, Surabaya and head of marketing CIMB Niaga Surabaya
Appointed as Director of Production & Technology since 2012, with over 30 years in KS
Previously President Director of PT KHI Pipe Industries and several positions including GM of Rolling Mill, GM of
R&D, Manager of Product Development, Superintendent of Quality Qontrol, and Engineer in Quality Control of KS
Hilman Hasyim Director of Production &
Technology
Appointed as Director of Marketing since 2015, with over 28 years in KS
Previously Director of HR & GA since 2007 and several positions including GM of Production Planning, Manager of
Organization Planning and MS and Production Handling Manager of KS
Appointed as Director of HR & Business Development since 2015, with over 28 years in KS
Previously Director of Logistics in KS, President Director PT Krakatau Engineering, Director of Business & Operation
PT Krakatau Engineering, and several positions including Manager of Engineering & Procurement and Deputy
Manager of Engineering & Procurement Division of PT Krakatau Engineering
Appointed as Director of Logistic since 2015, with over 15 years in logistic & infrastructure industry
Previously Director of PT Portco Infranusantara, General Manager Business Development of PT Nusantara
Infrastructure Tbk, and Regional Process Leader for ASEAN South PT Mitsui OSK Lines
Appointed as Director of Finance since 2016, with over 19 years in finance industry
Previously worked in PT Bank Negara Indonesia (Persero) Tbk as SEVP Digital Banking, CEO Region Jakarta-
Kemayoran, CEO Region Semarang, Market Intelligence & Business Portfolio Leader, Project Manager BNI
Reformasi, and Indonesian Ministry of National Development Planning (Bappenas)
Dadang Danusiri Director of Marketing
Imam Purwanto Director of HR & Business
Development
Ogi Rulino Director of Logistics
Tambok P.Setyawati S. Director of Finance
Sukandar President Director
Our management possess significant expertise and proven track record in steel and related industry
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Oversighted by experienced and reputable shareholders’ representatives with
knowledge of industry best practice
Appointed as President Commissioner in 2016
Currently serving as Deputy PIP BPKP on Politics, Social, and Security since 2013
Previously Commissioner of KS since 2013, Chair of the Audit Committee of PT Dirgantara Indonesia from 2012 to
2013
Appointed as Commissioner in 2012
Currently serving as President Commissioner of PT Tri Kharisma Harapindo, Serving as Senior Advisor PT Trans
Production
Previously Special Staff for the Vice President of the Republic of Indonesia from 2004 to 2009
Tubagus Farich Nahril Commissioner
Appointed as Commissioner in 2015
Currently serving as Director General of Manufacturing Industrial Base at the Indonesian Ministry of Industry
Previously Director of International Cooperation of Region I and Multilateral from 2010 to 2014
Appointed as Commissioner in 2015
Previously Investor Relation Consultant for PT Bank Tabungan Negara in 2014, Investor Relation Consultant for PT
Bukopin from 2010 to 2011 and Financial/Investor Relation Advisor for PT BNI 46 from 2008 to 2010
Appointed as Commissioner in 2016
Currently serving as Deputy for Resources and Infrastructure, Coordinating Ministry of Maritime Affairs since 2015
Previously Deputy Chairman for Natural Resource Development Technology for BPPT in 2010 to 2015, Director of
Center of Technology for Land Resources, Regional Development and Disaster Mitigation for BPPT in 2009 to 2010
and Head of Technology Center for Marine Survey for BPPT from 2003 to 2009
Harjanto Commissioner
Roy E. Maningkas Commissioner
Ridwan Djamaluddin Commissioner
Binsar H. Simanjuntak President Commissioner
Solid and Experienced Management Team (cont’d)